It is a current "driver" for the Wiimote. Not many software packages can use a Wiimote input data so GlovePIE works by taking input from one device (e.g. Wiimote) and translates it into fake inputs from another input device (e.g. mouse). It uses a language much like basic.
Example code:

Mouse.RightButton = Wiimote.A

That code tells the computer this: when ever the Wiimote's "A" button is pressed down it will have the same effect as pressing the right mouse button. This doesn't work in reverse. Here is a truth table for that code: